The chip powering iPhones and iPads is made in Austin . . . by Samsung

The two are fierce competitors in the smartphone and tablet markets, and ferocious opponents in the courtroom as a result. But they’re also dependent on each other, as Apple is a big customer for some of the components Samsung makes.

One of those parts couldn’t be more crucial: Samsung reportedly makes Apple’s A5 processor, which is used in the latest generation of iPhones and iPads. And according to a report by Reuters, Samsung makes those processors in Austin.

The factory is located near the intersection of East Parmer Lane and Dessau Road on the west east side of Austin.

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From the Reuters story:

The A5 processor – the brain in the iPhone 4S and iPad 2 – is now made in a sprawling 1.6 million square feet factory in Austin owned by Korean electronics giant Samsung Electronics, according to people familiar with the operation.

One of the few major components to be sourced from within the United States, the A5 processor is built by Samsung in a newly constructed $3.6 billion non-memory chip production line that reached full production in early December.

Nearly all of the output of the non-memory chip production from the factory – which is the size of about nine football fields – is dedicated to producing Apple chips, one of the people said. Samsung also produces NAND flash memory chips in Austin.

Samsung isn’t confirming to Reuters that Apple’s chips are made there, and of course Apple isn’t talking either. But the story indicates that much of its capacity is devoted to producing the A5 chips:

Samsung has added about 1,100 jobs to support the new non-memory chip production in the factory, which produces 40,000 silicon wafers every month, a Samsung spokeswoman said.

The rest of Samsung’s total 2,400 employees in Austin work in its NAND flash memory factory by the logic chip factory, she added.

The Korean company, which began the U.S. plant in 1996 to make its NAND flash memory chips, continues to produce them there in addition to the A5.

But as the Statesman story from July pointed out, this may not last long. Apple’s next-generation processor, the A6, is expected to be made overseas:

Some industry analysts now believe that Apple intends to shift the manufacturing for the A6, the successor to the A5, to Taiwan Semiconductor Manufacturing Co. starting in 2012. If that is true, it could leave the new Samsung factory with much less demand for the kind of chips it produces. But some analysts note that Apple, with its fast-growing mobile products business, could use both Samsung and TSMC to build those processor chips. Some analysts say Apple would only have taken such a tough stance against a key supplier with the strong backing of co-founder Steve Jobs.

Apple is a big part of the Austin economy in another way: It operates a large call center there for technical support. Chances are good that, when you call for help with your Mac or iOS device, you’re talking to someone in Austin.

The legal battle between the two companies could make Apple decide to reduce its reliance on its Korean rival, which in turn could affect jobs at the plant if Samsung can’t find a customer its its manufacturing. That would be bad news for Austin.